Jonathan Atkin

Jonathan Atkin asked about the M&A landscape concerning both the Asset Lifecycle Management (ALM) and data center businesses.

Answer

President and CEO Bill Meaney stated that Iron Mountain is not actively pursuing M&A for data centers, except for strategic brownfield acquisitions to establish platforms in new geographies. He highlighted that 400 MW of capacity coming online organically over the next 24 months supports growth. For ALM, Meaney sees it as an attractive market, with M&A being a key engine to expand its global footprint across 61 countries. Executive Vice President and CFO Barry Hytinen added that the ALM business is growing tremendously organically, and the company consistently evaluates acquisition opportunities, which typically involve mid-to-high single-digit EBITDA multiples that become sub-5x with synergies.

Jonathan Atkin inquired about the M&A landscape as it pertains to both the ALM and data center businesses.

Answer

Bill Meaney stated that Iron Mountain does not foresee significant M&A activity in data centers, having focused on brownfield acquisitions for platform entry in new geographies. For ALM, both Bill Meaney and Barry Hytinen confirmed it remains an attractive market for M&A, leveraging their global footprint and existing customer relationships, with acquisitions typically valued at mid-to-high single-digit EBITDA multiples, quickly synergizing to below 5x.

Jonathan Atkin of RBC Capital Markets asked about the industry dynamics in hyperscale decommissioning, the factors behind winning business from competitors, and the outlook for the sector's pipeline.

Answer

President & CEO William Meaney highlighted Iron Mountain's competitive advantages, including its flexible service model (on-site/off-site), secure chain of custody, and global scale. EVP & CFO Barry Hytinen described the pipeline as 'very good,' citing synergies with the data center business and the appeal of a consistent, global service offering in a fragmented market.

Jonathan Atkin asked about the regional opportunity set for data centers and the evolving business mix and M&A criteria for the Asset Life Cycle Management (ALM) segment.

Answer

CEO William Meaney detailed data center opportunities in the U.S., Europe, and India, and noted the ALM business mix is shifting towards enterprise. CFO Barry Hytinen provided the specific 59% enterprise ALM mix for Q1 and stated the M&A strategy targets tuck-ins at mid-to-high single-digit EBITDA multiples, which fall below 5x post-synergies.

Jonathan Atkin asked about 2025 expectations for capital recycling, cash renewal spreads in the data center portfolio, and any notable milestones for the land held for development in markets like India, Amsterdam, and Northern Virginia.

Answer

William Meaney, President and CEO, indicated no specific capital recycling plans for 2025 but highlighted a focus on gaining operating leverage in data center construction. He confirmed that development and permitting for the land bank are on track to support the 125 MW leasing goal for 2025. Barry Hytinen, EVP and CFO, added that cash renewal spreads are expected to continue rising due to the favorable demand-supply environment.

Jonathan Atkin asked for clarification on future capital expenditure requirements needed to fuel growth, particularly for the data center business.

Answer

CFO Barry Hytinen stated that due to strong leasing, the company will continue to invest heavily in data center growth capital, likely increasing by a couple of hundred million dollars from earlier expectations. He projected total 2024 CapEx to approach $1.8 billion, with the vast majority allocated to pre-leased data center projects, and anticipates a similar spending level going forward.

Jonathan Atkin inquired about any updates to Equinix's multi-year guidance provided at the Capital Markets Day in June 2025, asking if those targets remain relevant or if the 9% AFFO per share growth should be considered the new baseline.

Answer

Keith Taylor, CFO, highlighted the strong underlying momentum and execution, expressing satisfaction with the 2026 outlook. He stated it was premature to discuss 2027 and beyond but noted positive momentum and the potential for faster investment, suggesting a favorable trajectory.

Jonathan Atkin inquired about any updates to Equinix's multi-year guidance provided at the Capital Markets Day in June 2025, asking if those targets are still relevant or if the 9% AFFO per share growth should be considered the new baseline.

Answer

Keith Taylor, Chief Financial Officer, highlighted the strong underlying momentum in the business, driven by top-line execution, cost management, and efficient capital deployment. He expressed delight with the 2026 outlook but stated it was premature to discuss 2027 and beyond, noting that current momentum and favorable currency trends act as tailwinds for the organization.

Jonathan Atkin from RBC Capital Markets asked about the factors driving strong Q3 bookings momentum and its implications, as well as the contribution mix from direct versus indirect sales channels.

Answer

CEO Adair Fox-Martin cited continued momentum from Q2, a strategic focus on growth, and pre-sales from prior quarters as key drivers, noting it positions Equinix for strong recurring revenue in 2026. CFO Keith Taylor added that new data center openings in key markets like Dallas and Chicago also contributed. Regarding channels, Adair Fox-Martin described the resale motion as steady.

Jonathan Atkin from RBC Capital Markets asked about the factors driving the strong Q3 bookings momentum and requested an update on the contribution mix from direct sales versus partner channels.

Answer

CEO Adair Fox-Martin explained the momentum carried over from a strong Q2, characterized by broad-based demand, favorable pricing, and strong execution against a robust pipeline, which sets up recurring revenue for 2026. CFO Keith Taylor added that new data center openings in key markets like Dallas and Chicago also contributed. Regarding channels, Adair Fox-Martin noted a steady resale motion, though Q2 referrals were slightly lower.

Jonathan Atkin inquired about the drivers behind the strength in interconnection, including Equinix Fabric, and any emerging use cases.

Answer

CEO and President Adaire Fox-Martin attributed the solid Q1 interconnection performance, which added 3,900 net interconnections, to new customer deployments and expansion into new markets like Jakarta. She emphasized that Equinix views interconnection as a portfolio of solutions, where growth is driven by increasing the number of counterparties and network density, rather than just scaling bandwidth.

Jonathan Atkin asked about power management challenges in older, stabilized IBXs as customers draw more power, and its effect on SLAs and new business. He also inquired about any significant non-recurring SG&A or OpEx in the 2025 guide that might not repeat in 2026.

Answer

CEO Adaire Fox-Martin and CFO Keith Taylor explained that Equinix has a 26-year history of managing power, using demand-shaping to place workloads in appropriate assets and focusing on PUE improvements to create efficiency. Keith Taylor detailed that 2025 margin improvements come from lower power costs, operational efficiencies from the recent reduction in force, and winding down the Metal business. He also noted the investment in the xScale business is an upfront cost that will yield future returns.

Jonathan Atkin from RBC Capital Markets asked about the intended use of the company's significant cash balance and followed up on the progress and future plans for digital services, specifically Equinix Metal and Network Edge.

Answer

CFO Keith Taylor detailed that the $3.2 billion cash balance is allocated for a $1 billion debt repayment, the Philippines acquisition, dividends, and funding future capital needs for both core growth and the xScale 2.0 JV. CEO and President Adaire Fox-Martin noted that Equinix Fabric is a success with over a $250 million annual revenue run rate, while Network Edge drives ecosystem value. Keith Taylor clarified that Equinix Metal represents about 1.25% of revenues and has been relatively flat.

Jonathan Atkin (RBC Capital Markets) inquired about the potential implications for SBA from Latam developments, such as Vivo's focus on optimizing leasing costs and América Móvil's potential M&A in Chile. He also asked for SBA's philosophical stance on "tuck-in divestitures" given the high multiples observed in the private market.

Answer

Brendan Cavanagh, President and CEO of SBA, explained Vivo's cost optimization comments in Latam relate to greater infrastructure sharing to reduce ground rent pass-throughs, which SBA supports. He noted tight returns in Latam heighten carrier sensitivity to operating costs. On "tuck-in divestitures," Mr. Cavanagh is not philosophically opposed if there's significant valuation arbitrage but cited practical issues like financing structure and master lease agreements. He expressed skepticism about SBA as a seller and believes SBA's public valuation is too low compared to private market multiples.

Jonathan Atkin of RBC Capital Markets inquired about the long-term durability of demand drivers like Fixed Wireless Access (FWA) and network densification, and also asked about potential churn from customer rent reduction initiatives.

Answer

President and CEO Brendan Cavanagh affirmed confidence in the long-term durability of demand, citing significant traffic growth from FWA, future spectrum auctions, and AI-enabled applications. Regarding churn, he stated there are no specific initiatives underway that would materially lower rents, emphasizing that SBA maintains a fair balance with its customers.

Jonathan Atkin asked for projections on the year-end run rate for U.S. leasing given current activity levels and for an update on the status of bilateral contracting relationships and Master Lease Agreements (MLAs) with major U.S. customers.

Answer

President and CEO Brendan Cavanagh stated that while he expects the U.S. leasing run rate to be higher than the $9 million from Q1, he would refrain from giving a specific number. He clarified that SBA's only holistic MLA in the U.S. is with AT&T, and other agreements are typically equipment-specific, though the company remains open to broader agreements.

Jonathan Atkin asked about SBA's operational model for Latin America and whether the Millicom deal would alter its centralized approach. He also inquired about the impact of build-to-relocate activities and the recent Verizon tower portfolio sale on the market.

Answer

President and CEO Brendan Cavanagh affirmed that the centralized operational model for Latin America will remain unchanged, as it provides cost efficiency and consistency. He noted that build-to-relocate activity has significantly decreased. He viewed the Verizon tower sale positively, stating that its high valuation reinforces the value of SBA's own high-quality U.S. portfolio.

Jonathan Atkin from RBC Capital Markets asked for details on the record interconnection bookings, including pricing trends and the outlook for the second half of the year. He also followed up on the competitive impact of recent large-scale data center project announcements by other players.

Answer

CTO Chris Sharp attributed the record interconnection growth to sustained 0-1 MW bookings, global pricing standardization, and a comprehensive product suite including bulk fiber. CEO Andy Power added that Digital Realty's strategy is differentiated by its focus on major, diverse markets, which contrasts with some single-customer announcements.

Jonathan Atkin of RBC Capital Markets asked for an outlook on the leasing environment for the upcoming quarters, considering Q1 trends, recent hyperscaler demand commentary, and increased market uncertainty.

Answer

CEO Andrew Power acknowledged a strong start to the year with a record enterprise pipeline and robust hyperscale activity, including a major deal signed in March. Despite recent market volatility, Power stated that demand for large capacity blocks remains active. He emphasized Digital Realty's differentiated strategy of focusing on markets with diverse demand, maintaining strong enterprise execution, and selectively serving hyperscalers in core markets where the company holds a competitive advantage.

Jonathan Atkin of RBC Capital Markets asked about the expected acceleration curve for core FFO per share growth beyond 2025, considering the conversion of the significant bookings backlog into billings.

Answer

CEO Andrew Power reiterated previous statements about double-digit top-line growth flowing to mid-single-digit bottom-line growth. CFO Matt Mercier added that the company is set for continued improvement beyond 2025, citing available inventory, a $700 million backlog commencing over the next two years, an improving mark-to-market outlook, and a strong balance sheet with $6 billion of liquidity.

Jonathan Atkin asked about the implications of the strong backlog and robust demand on future capital expenditure levels and the company's balance sheet leverage goals.

Answer

CFO Matt Mercier indicated that CapEx for 2025 is not expected to be lower than 2024 levels. He affirmed that the company is already at its target leverage levels, supported by $5 billion of liquidity, and has prudently funded its plans to remain within its balance sheet goals while pursuing growth.

Jonathan Atkin from RBC Capital Markets asked about trends in carrier greenfield builds, private market M&A multiples for U.S. towers, and the company's strategy regarding the pace of ground lease purchases.

Answer

Interim President and CEO Daniel Schlanger noted that Crown Castle has not been active in the build-to-suit market due to unattractive returns. He observed that private tower multiples have remained higher than public ones but this has little impact on CCI's current strategy. He also confirmed that the company is increasing its focus on purchasing land under its towers and expects to allocate more capital to this program in the second half of the year.

Jonathan Atkin inquired about the sequence of executive changes leading to the new interim CEO and CFO, and asked for updated thoughts on build-to-suits or M&A within the new U.S.-only tower strategy.

Answer

Interim President and CEO Daniel Schlanger stated he could not speak to specifics regarding the former CEO's departure but expressed excitement for the company's path as a pure-play U.S. tower company. He noted that significant M&A is unlikely in the short term due to the focus on the fiber and small cell separation, but the company remains interested in build-to-suit opportunities with good returns.

Jonathan Atkin inquired about the criteria for inorganic growth in Europe, such as scale and valuation. He also asked if CoreSite is experiencing accelerating growth in cross-connects and cabinets and if any book-to-bill metrics could be shared.

Answer

CEO Steven Vondran outlined three key criteria for European M&A: a healthy carrier ecosystem, favorable long-term contract structures, and appropriate valuation, noting they have not yet found a portfolio that meets all three. For CoreSite, he confirmed strong demand, with expectations for high single to low double-digit revenue growth from cross-connects, elevated pricing, and stable churn, driven by durable enterprise demand.

Jonathan Atkin from RBC Capital Markets asked about the use of proceeds from the ABS transaction and the profile of the underlying assets. For DayOne, he inquired about the use case for the new Thailand campus and sought an update on the Batam project. He also asked for a comparison of the sales funnel from AI start-ups versus established internet companies in China.

Answer

CFO Dan Newman explained the ABS proceeds can be used to pay down debt or reinvest, enabling GDS to fund new opportunities without increasing net debt. CEO William Huang added that the Thailand campus meets strong demand from U.S. and Chinese customers, and the Batam project is proceeding well. Huang also clarified that current AI demand is mostly driven by established companies, though enterprise demand is emerging.

Jonathan Atkin asked about the outlook for contract renewals and churn in China for the second half of the year. He also inquired about the project timeline for the new data center in Singapore, following the successful CFA award.

Answer

CFO Dan Newman addressed churn, stating it has been running at a low annualized rate of ~5% of utilized area and is expected to continue at that level, with no exceptional churn anticipated. CEO William Huang provided an update on the Singapore project, explaining they are acquiring land and aim to launch the service before the end of 2026.

Jonathan Atkin inquired about plans to monetize GP interests and minority stakes in data centers held on the balance sheet, and the potential use of proceeds. He also asked for an update on fiber investment appetite and trends in Latin American towers and data centers.

Answer

CEO Marc Ganzi and CFO Thomas Mayrhofer confirmed plans to take some secondary capital from the DataBank fundraise, with proceeds potentially used for capital structure optimization. They see value in holding the Vantage SDC asset due to upcoming rent increases. Ganzi then gave a detailed update, highlighting strong performance at the Scala data center platform in Brazil, positive organic growth in LatAm towers, and a constructive view on enterprise and long-haul fiber, while remaining cautious on residential fiber.

Jonathan Atkin asked about the contract terms for domestic versus international data center clients, customer preferences for turnkey versus powered shell builds, emerging AI use cases, the competitive impact of foreign capital in India, and the state of the domestic fiber market.

Answer

CFO M.P. Vijay Kumar detailed that hyperscaler contracts average 9 years while enterprise contracts average 5 years, with near-zero churn. Chairman Raju Vegesna added that customers use a mix of build-to-suit, shell, and colo models. He described AI in India as evolving and positioned Sify as a technology-focused incumbent with an advantage over new real estate-centric competitors, also noting the growing need for new, high-bandwidth networks.

Jonathan Atkin questioned the tower business's future strategy, including its appetite for build-to-suit projects, potential capital needs for the existing portfolio, plans for ground lease acquisitions, and the readiness of its back-office functions for standalone operation.

Answer

Laurent Therivel, President and CEO of UScellular, stated that a build-to-suit strategy is not part of the current plan and that significant augmentation CapEx is not expected for existing towers due to their original construction. He confirmed a steady, opportunistic approach to acquiring ground leases will continue. Therivel also explained that while work is ongoing to separate back-office functions for the tower company, the process is about isolating existing costs rather than adding significant new expenses.